International Buyers Payment Preferences.

When selling internationally you have of course to be mindful of your buyer’s experience. There is no point offering great priced products to Australia with a delivery form that only accepts US ZIP codes. Likewise, you’ll get limited orders if you only offer payment facilities that buyers can’t, or don’t want to, pay through.

While Visa and Mastercard are available pretty much globally, people in many countries have their own preferences of how to pay that is both based on security concerns and simply habit. Here we will look at some of the various methods available to buyers in countries you may be considering targeting.

Germany

During my many consultations with European retailers one of the first questions that comes up is about Germany. As the largest market in Europe, it’s a key target for the region and also one with some specific cultural ways about it. Online payments are no different and although Germany is not unique in this, they have a stronger tendency towards paying on invoice than most countries. The ECC Cologne University, in a 2014 paper: Payment in eCommerce, noted 24% of Germans will abandon their cart if their preferred method was not available and a further 27% would only continue if their next preference was available. With around 70% of online payments in 2014 made through either Payment on Invoice, Direct Debit or PayPal, you need to offer at least two of these if you want to have a good offering in this market. Below is an interesting graph from the EHI Retail Institute showing payment methods for the top 1000 online German stores and the percentage of payments. If you’re not a German retailer, I’m guessing this looks pretty different from the makeup of your own buyer’s payment types:

United Kingdom

Unlike in Germany, buyers are very used to paying online with their debit or credit card. It would be unusual to offer pay on invoice or Direct Debit. PayPal is also very widely used. According to research by Payvision If you allow standard debit/credit card purchases you will have covered 75% of the market, if you offer PayPal you’ll capture another 21%. Buyers in the UK get strong fraud protection. The added guarantee of PayPal protection however can be a convincing factor for UK buyers when paying overseas.

France

Very similar to the UK, credit/debit cards and PayPal provide coverage of most buyer preferences. The most popular, Carte Bleue, is usually processed via the Visa network.

Spain

By offering credit/debit card payments and PayPal in Spain you can capture most of the market, around 80%. However bank transfers are still common using either the buyers own banking facilities or overlaid internet services from Trustly or SEPA so if Spain is a particular focus for you then should look to accept transfers.

Poland

Preferred payment methods in Poland, and much of Central and Eastern Europe are somewhat different to those in the west. While in Poland credit/debit cards still make up 45% of online payments (usually through PayU), bank transfers make up 35%. PayPal is the main dedicated online payment system but this accounts for only 5%. This is what the stats say. However, my experience of living in Poland and paying online is that it’s somewhat tricky to pay via card online. The available card payment methods are convoluted and often several clicks away, whereas transfers are often the first option provided. I often give up and choose to pay cash on delivery which is widely used here in practice.

China

As usual, the makeup of China’s preferences is somewhat different to the west. Given the early days of online in China were fraught with poor quality products and even fraud Chinese consumers became fixated, quite rightly, with security online. This lack of trust means there are two main methods of payments in China. Online supported payments, usually through Alipay or Union Pay, where buyers can pay through their debit/credit cards but the funds are securely stored until receipt of goods, or through cash on delivery. The split is roughly 65% online payments, 30% cash on delivery and 5% other. You should look to offer both of these methods if you want to make user experience frictionless in China.

India

Ecommerce in India is a cash on delivery economy. It is estimated that up to 70% of online transactions in India are fulfilled by cash payment while a recent survey by Nielsen Global suggested 87% of consumers had paid cash for an online purchase in the last 6 months.

The USA

For America it’s fairly straight forward and very similar to the UK. Buyers pay either by debit/credit card or by PayPal. According to Statista, last year credit/debit cards made up 72% of ecommerce transactions and PayPal 12%. The remaining was a combination of American Express and other PayPal type transactions. But basically, accept cards and PayPal and the vast majority of buyers will be able to and be happy to pay.

Australia

The theme in English speaking markets is pretty clear with debit/credit cards, along with PayPal, taking up the majority of ecommerce payments. However with Australia, although this is still true, there is still over 7% of payments being made by bank transfer and nearly 5% cash on delivery. The following graph from eShopWorld shows a breakdown that is more varied than in most other English language countries:

Japan

Last in this list but not last in variety or unexpected twists for the retailer looking to break into this market. The majority of ecommerce transactions are completed with credit/debit card but this is followed by a solution called Konbini, which can be made at one of 55,000 convenience stores in Japan. Essentially the buyer makes the purchase on your site and then pays for it at an outlet. Nearly 20% of ecommerce payments are made this way. There is a risk for retailers here in that about 13% of orders are never paid for, so local sellers tend to wait until the payment is cleared and completed before shipping. Cash on delivery is also still common.

There are of course many other countries you may want to localise your payment solutions for and they all have their nuances, though mostly variations on the payment methods above. Some countries like cards, some like cash, others like security first and foremost.

When really trying to penetrate a particular country it is important that payment strategy be taken into account before finalising your overall plans for that country.

About Mark Ellis

Mark is the VP for Growth and Partnerships at Webinterpret, a leading Cross Border Technology company. Before that Mark was leading the operations for eBay's European cross border program. He has over 20 years of eCommerce industry experience, guiding and delivering strategic change in retailers, working with companies such as Dyson, Regatta, Boots and Arcadia Group, leading multi-million dollar programs for industry giants like Dunnhumby and working with small businesses delivering innovative retail solutions.

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